Date: Wednesday, January 2, 2022
Source: Supply Chain Dive
The supply chain has become the piñata for almost any industrial or retail problem. Here's how procurement professionals can help cut through the noise.
We can’t escape the supply chain. From a lack of potato chips on supermarket shelves to a shortage of computer chips impacting automotive assembly lines, the supply chain has become the piñata for almost any industrial or retail problem. And those who blame the supply chain the most have no clue what it is, or what it isn’t.
Local and national news tends to throw the term "supply chain" around liberally, and in most cases inaccurately. The snack food supplier that couldn’t replenish her shelves at the local mega-mart because of an ice storm was equated with a supply chain problem. COVID test kits not ordered in time? Well, it’s a supply chain problem. Missing a part to keep the school bus running? It's that darned supply chain again.
For those of us in the supply chain business, especially procurement professionals, we juggle sourcing, supplier performance and logistics on a daily basis. We’re used to managing through supply chain risk, the ebb and flow of sourcing and supplier relationships, operational workarounds, unclear requirements and the weaknesses of ERP systems.
And while the pandemic has magnified some issues, there is really nothing new. Though it may be strained, the supply chain as we know it is functioning, no matter what the pundits say.
Until this blame the supply chain storm passes, here are three things procurement professionals can do to cut through the noise.
1. Reset expectations to reflect shifting business conditions
Yes, there are gaps in supply, extended lead-times, and confusion among the tiers and throughout the channels. But these issues will be solved and before long we’ll be trying to figure out what to do with all of the hedge inventory we’ve bought "just in case" like toilet paper and hand sanitizer.
Be sure to have accurate lead times in the system, provide regular forecasts and increase communication with critical suppliers. Be flexible with alternative products and services, and embrace the concept of workarounds. It’s during these kinds of professional challenges that we learn the most about our suppliers, our companies, and ourselves.
2. Rely on supplier relationships
Let’s revisit that old adage of "dance with the one that brought you": Work within your existing supplier community, at least as a primary goal. Resist the call to react to shortages by chasing after new suppliers in search of inventory or short-term price reductions.
You’ve spent considerable time and energy nurturing relationships with high-performing suppliers. Trust that they have your, and your company’s, best interests at heart and that they’ll come through for you. Breaking relationships in a time of hardship could lead to a long-term sourcing disaster. But even your best suppliers know that you may have to move on if the situation warrants.
Be prepared to defend your supplier relationships to less enlightened colleagues. Most everyone is a backseat buyer. In the past, I have been called a vendor defender for the way I’ve stood up for my suppliers in internal operations meetings. You are their advocate in what can be hostile territory. Push back on finger pointing at suppliers.
3. Leverage the spotlight
There might not be a better time to be in procurement and supply chain management than right now. As an underappreciated and often understaffed profession, we often clamor for recognition and the proverbial seat at the table. Well, today we are once again on the front lines and our efforts can make a real difference between success and failure for our companies.
Supply chain black swans pass and life will eventually return to normal. Everything in business eventually reaches equilibrium and when it does, be sure that your hard work, and that of your suppliers, is recognized and rewarded. It would be a shame if we professionally didn’t take proper advantage of this crisis.